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China’s Slowdown Tests Central Bank Amid Debate Over Easing

  • Economists divided over whether further RRR cuts are coming
  • PBOC’s latest report signals easing bias as growth slows
Updated on

China’s marked economic slowdown in the second half of the year is testing the central bank’s policy mettle and dividing economists over whether more aggressive action is needed to avoid a deeper downturn.

The People’s Bank of China is having to juggle multiple economic risks, pulling policy in different directions. Growth is heading for lows not seen since 1990 -- if last year’s pandemic year is excluded -- factory-gate inflation is soaring, while the currency is rallying on the back of record trade surpluses.